From the IMF: Assessing Risks to Global Financial Stability <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/kunB4SnAh4g&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/kunB4SnAh4g&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
Actually, more homeowners are effectively underwater than this statistic shows. Because most real estate transaction costs are paid by the seller, the seller needs 5% to 7% positive equity to break-even at the sale. Thus, more than 20% of homeowners can't sell their homes without bringing money to the sale (probably about 25% of household have this problem). On the one hand, that prevents them from selling (good for keeping inventories low). On the other hand it means they will be in deep trouble if they are forced to move. The other issue is that underwater mortgages are a sign that these homeowners are technically insolvent. Given that most Americans have minimal savings and have other consumer debts (car loans, credit card debt, student loans, etc.), most of these underwater mortgages represent technically-bankrupt households. Bankrupt households aren't likely to be approved for more credit (no car loans or refis for these folks) and aren't likely to boost consumer spending.
Edgar Cayce talked about the shifting of the poles many years ago. Most here wouldn't even know his name.